Spending cuts to take effect March 1 absent congressional action to avert them

Senate Democrats proposed a $110 billion measure Thursday to put off mandatory across-the-board spending cuts set to take effect March 1.

The package made public by Senate Democratic leaders calls for replacing the so-called sequester cuts with a combination of increased tax revenue from millionaires, ending agriculture subsidies and reducing defense spending after the war in Afghanistan ends.

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Obama: Avoid sequester, pass small cuts

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Obama: Avoid sequester, pass small cuts01:28

A White House statement said that opposing what it called the balanced plan by Senate Democrats would amount to prioritizing "tax loopholes that benefit the very few at the expense of middle- and working-class Americans."

The issue extends a long-running political dispute over government spending and federal deficits that dominated President Barack Obama's first term, as well as his successful re-election campaign last year.

Republicans were forced to concede on their steadfast opposition to increased taxes by agreeing in January to higher rates on top income earners as part of a deal to avoid some of the harshest impacts of what was known as the fiscal cliff, which included the sequester cuts and automatic tax hikes.

While the White House and congressional leaders from both parties oppose sequestration, the approach for averting it has become the latest congressional showdown involving ideological differences over the size and role of government.

House Speaker John Boehner noted on Thursday that the House passed bills last year to prevent the cuts from affecting the military, but Senate Democrats never acted.

"Those days are over," Boehner declared, but he also signaled a willingness to negotiate with the Senate over any legislation it sends over. "It's time for the Senate to do their work. We can ... if they're willing to pass a bill, we'll find some way to work with them to address this problem."

The plan unveiled Thursday by Senate Democrats would just replace the cuts through the end of this year, leaving time for possible negotiations on a broader deficit-reduction package that would eliminate sequestration entirely.

The Democrats proposed $54 billion in revenue by implementing the "Buffett rule," a principle by billionaire financier Warren Buffett that he shouldn't pay a lower tax rate than his secretary.

Under it, anyone with adjusted income of more than $1 million after charitable deductions would pay a minimum 30% tax rate.

Other revenue measures in the package include ending tax breaks for companies that ship jobs overseas and closing tax loopholes for the oil industry.

In addition, the package would cut military funding starting in 2015, following the planned end of U.S. combat operations next year in Afghanistan. It would also end agriculture subsidies for a total saving of $55 billion.

"Billions in direct payment subsidies are paid out even in good times and for crops farmers aren't even growing," explained Sen. Debbie Stabenow, D-Michigan, who chairs the Senate Committee on Agriculture, Nutrition and Forestry.

Panetta said Wednesday that Congress needs to put aside party and ideological divisions that he called "the greatest concern I have for our national security."

He expressed concern over how the world will view the United States if it fails to avert sequestration.

"What (other countries) worry about is what I worry about, which is whether or not we can govern and whether or not we can face the tough decisions that have to be made and resolve those," Panetta said.